Saracen in plant rethink

Josh ChiatKalgoorlie Miner

Thursday, 15 March 2018 3:56PM

Raleigh Finlayson says Goldfields gold producer Saracen Mineral Holdings could ramp up production to 400,000 ounces a year sooner than expected, after putting a long-dormant plan to expand its Carosue Dam processing plant back on the table.

The company’s board jettisoned the extension of Carosue Dam’s mill from 2.4 million to 3.2Mtpa in 2013, after seeing the price of gold plummet just days after Mr Finlayson he took over from Guido Staltari as Saracen’s managing director.

But with a brighter gold market in 2018 and drilling defining vast new ore zones at Saracen’s Karari and Whirling Dervish underground deposits at Carosue Dam, 120km north-east of Kalgoorlie-Boulder, it is back under consideration.

“If you look at it now and the gold price is about $1700/oz, you would have said ‘box on with it’,” Mr Finlayson said.

“But it was the right decision at the time and one that needed to be made.

“We also had salary reductions across the board, we had redundancies and one of our underground development projects was delayed.”

At the time Saracen was mining a series of medium to low-grade open pits.

Now Carosue Dam is primarily a higher-grade underground project, with development at Whirling Dervish expected to start later this year which will eventually see it eat up its milling capacity.

“It’s really been the drill data that we’ve seen out of both of those assets (Karari and Whirling Dervish),” Mr Finlayson said.

“We’re looking at it where we can basically fast-track these mines and put that crushing or that plant expansion on the table and get to 400,000ozpa.”

Including the Thunderbox mine near Leinster, Saracen hit a run rate of 300,000ozpa last year.

Mr Finlayson said the mill expansion study would be done in a couple of months, with capital costs likely to be relatively low because it had already purchased lead items and infrastructure in 2013.

Saracen’s forward plans show it potentially ramping up to 400,000ozpa by 2025, when its current reserves will be coming to the end of their life.

That could come sooner if the expansion was approved, Mr Finlayson said.

The decision on the costs of the expansion will be made in two to three months, but it will take another 18 months of drilling to identify the resources to fill the mill and make an investment decision.

A $50 million exploration budget next financial year will help, although that will include an underground drill drive at Thunderbox, where Saracen is weighing up whether to develop a bulk underground operation using sub-level cave techniques, or use a lower-cost mining method targeting high-grade underground ore zones.